Making Money From Currency Trading
FOREX stands for Foreign Exchange and it stems from the international financial market. That is, the Forex market, the place where currencies of different countries are bought and sold in a similar manner to the buying and selling of share market in the ASX, Australian Stock Exchange. You may explore this link http://www.parclife.net/ to see more. Forex market started in the 1970's and that is when floating of currencies and free exchange rates began. Like share prices, it is the people who traded in the Forex market that affects the prices of the currencies traded in accordance to the law of supply and demand. Hence, if the market force dictates, e.g. if the US Federal Reserve decides to raise interest rates to curb inflation while Australia Reserve Bank have the interest rate on hold, that should stimulate a change in exchange rate. One should therefore see interest rate effect with the US$ worth more in value than AUD when this happens. The amount of money traded daily in the Forex market is uniquely enormous. The rate of exchange makes Forex the single most liquid financial market with currency traded amounting from 1 to 1.5 trillion US dollars per day. Owing to this enormity, it is not possible for the Forex market to be manipulated externally. Hence, no single trader or even any financial institution trading in it has the wealth to influence the price of any currency in its favour.
The Forex is so fluid and so much exchange at such a fast pace that it is just impossible for anyone to affect the market of any one major currency. The sheer liquidity of the Forex market with so many exchange taking place, enable the traders to open and close position within seconds. This is because there are always willing buyers and sellers available at any one time since the collective exchange of the various world Forex centers is considered open for 24 hours as it spans across different time zone. Forex is naturally unique compared to the stock market which is normally associated with long term investments. Explore this link http://www.parclife.net/ to know more about investment in Singapore. In currency trade, a minute change in prices of a currency generate situation that permits investors to apply all sorts of strategies to their advantage. However, there are also long term hedge investors involved in Forex and also short term investors that make use of credit lines to seek large gains over a short period.